Macroscope | Kraft Heinz vs Unilever: A humiliating US$143 billion tale of Buffett and rebuff, and a reptile called 3G
Kraft left with fresh Hellmann’s mayonnaise on its face, as Unilever dismisses US giant’s surprise US$143 billion offer out of hand
One day, some weeks ago, some adolescent, spotty-faced analyst in the shareholder group of Kraft Heinz had the bright idea of taking over Unilever. It was a bad day in the office.
Unilever has successfully been in business for over a century. It runs great brands like Dove, Magnum, Lipton, Marmite (love it or hate it), Hellmann’s mayonnaise and (two of my best mates) Ben & Jerry.
Its founder, William Lever, saw the need to reduce disease by manufacturing soap.
And like the great industrial-philanthropic English families of the time – Cadbury’s for example – he desired to do good for the workers who were making him rich.
Lever built Port Sunlight – a model village as Cadbury did with the Bournville Village. They were the Gates Foundation of the day to whom Warren Buffett has pledged a great inheritance. Unilever still practices the philosophy of pursuing sustainable business, beloved of long-term investors.
Enter the Wolf of Wall Street. In recent years Kraft, the maker of Oscar Meyer sausages, Heinz ketchup, and Cadbury’s chocolate has become exceedingly acquisitive. The main shareholders are Warren Buffett, admittedly not known for being a predator. His partner however is 3G, a most impressive yet reptilian private equity company run by Brazilian Jorge Paulo Lemann which epitomises avarice that Lever and Cadbury would have found anathema to their values.